Yes, but only through specific loan programs that shift the risk to the lender
You can buy a house with zero down payment, but you cannot do it with a conventional mortgage. Banks that offer conventional loans require a down payment because it protects them if you stop paying and they have to foreclose. With no skin in the game, you become a higher risk.
Three government-backed loan programs let you buy with no down payment: VA loans (for military members and veterans), USDA loans (for rural properties), and FHA loans (for anyone who meets income and credit requirements). Each has different rules about what property you can buy, where you can buy it, and what you pay in fees instead of a down payment.
A fourth option—down payment assistance programs run by nonprofits, state housing agencies, or employers—can cover your down payment for you, but you still need to may have access to for a mortgage first. These are not the same as getting a loan with zero down; they are a second loan or grant layered on top of your primary mortgage.
Key Takeaways
- VA loans and USDA loans genuinely require zero down payment, but VA loans are only for military-connected borrowers and USDA loans only for properties in designated rural areas.
- FHA loans allow as little as 3.5 percent down, not zero, but they are the most accessible option for first-time buyers with lower credit scores.
- With zero-down loans, you pay mortgage insurance (VA funding fee, USDA may provide fee, or FHA mortgage insurance) instead of a down payment, so your monthly payment is higher.
- Down payment assistance programs exist but require you to first may have access to for a mortgage on your own; they do not replace the need to pass a lender's underwriting.
VA loans: zero down for military members and veterans
A VA loan is a mortgage may provide by the U.S. Department of Veterans Affairs. The may provide means the VA promises to cover part of the loan if you default, which allows lenders to offer 100 percent financing with no down payment required.
You must have served on active duty, be a current member of the National Guard or Reserves, or be a surviving spouse of a service member who died in service or from a service-connected disability. You will need a Certificate of may be able to access from the VA, which you can request online through VA.gov or through your lender.
Instead of a down payment, you pay a VA funding fee—a one-time charge that ranges from 1.4 percent to 3.6 percent of the loan amount, depending on your down payment (even though it is zero) and whether you have used a VA loan before. This fee is usually rolled into your loan, so you do not pay it upfront, but it increases what you borrow and therefore your monthly payment.
VA loans have no prepayment penalty, no mortgage insurance requirement, and typically lower interest rates than conventional mortgages. You can use a VA loan to buy a single-family home, a condo (if it is VA-approved), or a multi-unit property if you will live in one unit.
USDA loans: zero down for rural property buyers
A USDA loan is a mortgage backed by the U.S. Department of Agriculture and designed to help people buy homes in rural areas. Like VA loans, USDA loans require zero down payment because the USDA guarantees the loan.
The catch is location: the property must be in a designated rural area. The USDA publishes a map showing which counties and towns may have access to; you can check your address on the USDA website before you start house hunting. Many suburbs and small towns outside major cities may have access to, but dense urban areas do not.
You must also meet income limits, which vary by county and household size. Generally, your household income cannot exceed 115 percent of the area median income, though some counties allow up to 125 percent. A USDA loan officer or your lender can tell you whether your income qualifies for your specific county.
Instead of a down payment, you pay a USDA may provide fee—typically 2 percent of the loan amount, rolled into your mortgage. You also pay an annual annual fee of 0.55 percent of the remaining loan balance each year, added to your monthly payment. USDA loans have no prepayment penalty and no mortgage insurance requirement beyond the annual fee.
FHA loans: 3.5 percent down, not zero, but the most accessible option
An FHA loan is a mortgage insured by the Federal Housing Administration. FHA loans allow a down payment as low as 3.5 percent, which is much lower than conventional mortgages (typically 5 to 20 percent), but it is not zero.
FHA loans are available to anyone—there is no military service requirement, no rural property requirement, and no income limit. You need a credit score of at least 580 to may have access to for the 3.5 percent down option; if your score is between 500 and 579, you must put down 10 percent.
Because you are putting down less than 20 percent, you pay FHA mortgage insurance, which protects the lender if you default. The insurance has two parts: an upfront premium (1.75 percent of the loan amount, usually rolled into your loan) and an annual premium (0.55 to 0.80 percent of the remaining loan balance, added to your monthly payment). The annual premium stays on your loan for the life of the loan if you put down less than 10 percent, or for at least 11 years if you put down 10 percent or more.
FHA loans allow you to buy single-family homes, condos, townhouses, and multi-unit properties (up to four units) if you will live in one unit. You can also use an FHA loan to refinance an existing mortgage.
Down payment assistance programs: a second loan or grant on top of your mortgage
Nonprofits, state housing agencies, and some employers offer down payment assistance that can cover part or all of your down payment. These are not zero-down mortgages; they are additional money layered on top of your primary loan.
Down payment assistance usually comes in three forms: a second mortgage (you owe it back), a grant (you do not owe it back), or a forgivable loan (you owe it back only if you sell the house within a certain period). The terms vary widely by program.
To use down payment assistance, you must first may have access to for a primary mortgage on your own. The lender will then factor the assistance into your debt-to-income ratio, which may reduce how much you can borrow overall. Some programs have income limits, credit score minimums, or first-time buyer requirements; others do not.
To find programs in your area, contact your state housing finance agency, your city or county housing authority, or a nonprofit like NeighborWorks or the National Council of State Housing Agencies. Some employers (especially government agencies and large corporations) also offer down payment assistance to employees.
What you actually pay instead of a down payment
With zero-down loans, you do not avoid paying upfront costs—you shift them into your monthly payment and sometimes into fees due at closing. Here is what each program charges:
| Loan Type | Down Payment | Upfront Fee | Monthly Cost |
|---|---|---|---|
| VA | 0% | VA funding fee: 1.4–3.6% of loan amount | No mortgage insurance |
| USDA | 0% | USDA may provide fee: 2% of loan amount | Annual fee: 0.55% of loan balance |
| FHA | 3.5% | Upfront mortgage insurance: 1.75% of loan amount | Annual mortgage insurance: 0.55–0.80% of loan balance |
All three programs roll these fees into your loan, so you do not pay them out of pocket at closing. But because you are borrowing more, your monthly payment is higher than it would be with a conventional mortgage and a down payment.
Credit score and income requirements vary by program
VA loans have no official credit score minimum, but most lenders require a score of at least 620. Income requirements depend on your debt-to-income ratio—typically, your total monthly debt payments (including the new mortgage) cannot exceed 41 to 50 percent of your gross monthly income.
USDA loans require a credit score of at least 580, though some lenders go as low as 540. Income limits are based on area median income and household size, and they vary by county. Your lender can tell you the limit for your specific area.
FHA loans require a credit score of at least 580 for the 3.5 percent down option. Like VA loans, your debt-to-income ratio typically cannot exceed 43 to 50 percent of gross monthly income, depending on your credit score and compensating factors (like savings or a co-signer).
If your credit score is below 580, you will not may have access to for any of these programs. You would need to work on raising your score before applying, or explore down payment assistance programs that may have lower credit requirements.
Frequently Asked Questions
Can I use a VA loan or USDA loan if I have bad credit?
VA loans have no official credit score minimum, but most lenders require 620 or higher. USDA loans require 580 or higher. If your score is below these thresholds, you will not may have access to. You can work on raising your score by paying down debt and making on-time payments for several months, then reapply.
What happens if I use a zero-down loan and the house value drops?
You will owe more than the house is worth, a situation called being "underwater." You cannot walk away without consequences—you are still legally responsible for the debt. If you sell, you will have to pay the difference out of pocket. If you refinance, you may not may have access to because lenders typically require at least 20 percent equity.
Can I get a zero-down loan if I am self-employed?
Yes, but lenders require more documentation. You will typically need two years of tax returns, profit-and-loss statements, and bank statements to prove your income is stable. Some lenders are stricter with self-employed borrowers, so shop around.
Do I have to use a real estate agent to buy with a zero-down loan?
No, but it is common. Real estate agents do not charge you directly; they are paid by the seller's agent from the sale commission. Using an agent can help you navigate the process, but it is not required.
Can I pay off the mortgage insurance or VA funding fee early?
VA funding fees and USDA may provide fees cannot be removed once the loan closes. FHA mortgage insurance can sometimes be removed if you refinance into a conventional loan once you have built enough equity, but this requires a new application and closing costs.